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BP finds new hope in Russia

Logo at BP gas station in Manchester, England

TEXT OF STORY

STEVE CHIOTAKIS: BP may still have a dark cloud in the U.S. after after last year's oil spill in the Gulf of Mexico. But it still has important friends. And, possibly, a new best friend -- Russia. A $16 billion deal gives the oil giant almost 10 percent of Kremlin-controlled Rosneft. Which in turn takes a 5 percent share in BP.

Peter van Dyk reports from Moscow.


PETER VAN DYK: No international oil major is more deeply involved in Russia than BP, and after more than a decade of ups and downs, it knows the potential pitfalls all too well. But with the shadow of the Gulf of Mexico spill casting doubts about its ability to grow in the U.S., the unprecedented share swap may have been too good to refuse.

The deal effectively replaces -- at half the price -- the reserves BP sold to pay for the Gulf spill, and it gives the company access to billions of barrels of oil thought to lie beneath the Arctic Sea.

Ivan Mazalov of Prosperity Capital Partners brokerage in Moscow says BP had little choice.

IVAN MAZALOV: In the United States, which is the most important part of the world for BP, BP was rather burnt recently. I think that BP may have had to reevaluate their strategic priorities and put more emphasis on diversification from the United States even.

BP's CEO denies his company is running away from the U.S., which accounts for a quarter of its oil and 40 percent of its profits. But lawmakers in Washington have raised fears over national security concerns. One says the company once known as British Petroleum should now be called Bolshoi Petroleum.

For Marketplace, I'm Peter van Dyk in Moscow.

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